Global stocks higher as Wall Street rebounds

“Buying the dip has been a very difficult call in recent days, with every attempt at engagement punished in subsequent market moves, so investors will be hoping that this is a genuine buying opportunity. The key event of the week is US consumer price data on Wednesday, with investors anxious to determine whether the inflation fears that have helped to drive recent market moves have been overdone or if these concerns are justified.”

Wall Street stocks are joining a global rebound as buyers move in following last week’s sharp overall falls, but selling of US Treasuries ahead of inflation data is leaving a sense of caution.

The S&P 500 is up 0.6 per cent in mid-morning trade, adding to a 1.5 per cent rebound on Friday. Over last week however, the S&P 500 shed 5.2 per cent, its biggest five-day fall since January 2016.

Investors are waiting for US inflation figures, due out on Wednesday, for signs the market will settle or that more volatility is on the way. Economists expect the US consumer price index to rise for a fifth straight month.

The prospect of higher inflation and increased government spending lifted the 10-year US Treasury yield to 2.9 per cent for the first time since 2014 according to Reuters data. It rose by as much as 7.1 basis points to 2.9020 per cent, taking it toward the milestone of 3 per cent, last passed four years ago. The selling, which lifts yields, is easing in early US trade, leaving the 10-year yield up 2 basis points at 2.85 per cent.

The Europe-wide Stoxx 600 is 1.2 per cent higher, turning around from a tumble of 5 per cent over the past five sessions. That was the worst performance since the first week of 2016 that was marred by worries over China.